The US Dollar Index (DXY) has been grinding higher, aiming for the 102.00 resistance level, following the recent banking jitters and concerns over the US debt ceiling. The index recently experienced a significant jump, breaking a three-day downtrend and rising the most in a week. However, mixed US data, uncertainty surrounding the Fed’s policy pivot, and downbeat yields failed to prod DXY bulls.

Key Takeaways:
✅ The US Dollar Index is struggling to overcome the 101.90 resistance confluence.
✅ Fresh fears of banking fallouts and US default allowed the DXY to print the first daily gains in four days.
✅ The mixed US data failed to prod the DXY buyers, and Wall Street closed in the red.
✅ Major central banks are cutting the frequency of their dollar liquidity operations with the US Federal Reserve from May, signaling that last month’s financial market volatility is essentially over.
✅ US Durable Goods Orders for March will be important to watch as it offers clues for Thursday’s US Gross Domestic Product (GDP) for the first quarter (Q1).

Earnings updates from First Republic Bank have renewed concerns over banking fallouts, even as major central banks seem confident in their efforts to restore market confidence. While the world’s top central banks are cutting the frequency of their dollar liquidity operations with the US Federal Reserve from May, the cautious mood ahead of today’s US Durable Goods Orders for March continues to challenge US dollar bulls.

Despite these challenges, fears of the US debt ceiling expiration weigh on risk appetite, allowing the DXY to remain firm. US Treasury Secretary Janet Yellen has warned that failure by Congress to raise the government’s debt ceiling could trigger an “economic catastrophe” that would send interest rates higher for years to come.

It’s worth noting that mixed US data failed to provoke DXY buyers, as Wall Street closed in the red, and US Treasury bond yields were down. The US Conference Board’s Consumer Confidence Index edged lower to 101.3 for April, versus 104.0 prior, and the Present Situation Index ticked up to 151.1 during the same month from 148.9 prior. Meanwhile, the Consumer Expectations Index dropped to 68.1 from 74 previous readings, and the one-year consumer inflation expectations eased to 6.2% in April from 6.3% in March. In other releases, US New Home Sales rose to 0.683M MoM in March, versus 0.634 expected, while the S&P/Case-Shiller Home Price Indices and Housing Price Index both rose past market forecast to 0.4% and 0.5%, respectively, for February.

Moving ahead, US Durable Goods Orders for March will be critical to watch as they offer clues for Thursday’s US Gross Domestic Product (GDP) for the first quarter (Q1). A downbeat print, versus 0.8% expected and -1.0% prior, could cause the US Dollar Index to consolidate recent gains.

Technical Analysis:
Despite the recent rebound, the US Dollar Index remains below the 101.90 resistance confluence, consisting of a 21-day moving average (DMA) and a three-week-old descending resistance line. This has kept the DXY bears hopeful.

SELL signal for DXY.